Going Global Global Supply Chain Management and Importing
Chapter 1 Introduction to Global Supply Chain Management
INTRODUCTION What is a global supply chain? What is global supply chain management?
MANAGING A GLOBAL SUPPLY CHAIN CHALLENGES Coordinating flow of materials, information and finance Conflicting business objectives and requirements between suppliers and buyers. Intellectual property protection Identifying and assuring the reliability of international business partners Inherent uncertainty between markets and consumer demand Currency fluctuations Assessing finance and insurance Compliance with international regulations and standards
Supply chain processes SCOR model
Chapter 2 Planning the Global Supply Chain
Supply chain planning Level One Refine and confirm the business objectives that the supply chain must support Review the external markets: The economic environment Current regulations in the market Technological developments Cultural, demographic, and infrastructural issues Review the competing organizations in the international marketplace Review internal processes: Product characteristics Service characteristics Operational strategy Competitive strategy analysis
Supply chain planning Examine existing supply chain processes and assess how they match business requirements Level Two Network Processes Information systems Organization Risk management
Supply chain planning Level Three Plan sourcing strategy Plan reverse logistics or returns Add operational detail to basic supply chain design Plan product build process Plan delivery
ELEMENTS OF A SUPPLY CHAIN PLAN Cover page Executive summary Supply chain maps Supply chain strategies Human resources required Sourcing Production Materials management and handling Product modifications (if required) Inventory management
ELEMENTS OF A SUPPLY CHAIN PLAN Storage and warehouse space Order processing Shipping and transportation Delivery Quality control After-sales service and customer satisfaction Risk management External support partners Financial requirements Implementation schedule
Supply chain plan Implementing the plan Managing organizational change
Chapter 3 Managing Procurement and Sourcing
Global sourcing Risks involved: What is global sourcing? Quality Ethical considerations Patent protection Transportation costs Shipping and distribution schedules Risks related to extended transit times Cultural differences Documentation intricacies Instability of foreign governments Weather conditions
The sourcing process
Global sourcing Make or buy analysis E- procurement Efficient sourcing Total acquisition cost analysis Primary and Secondary sourcing Supply base rationalization and consolidation
Outsourcing Advantages Reduction in costs Gaining outside expertise Customer service improvements Focus on core competencies Obtaining outside technology Disadvantages Possibility of increased costs Loss of company control Negative impact on company employees Negative impact on customers Relationship problems Considerations Method of payment Payment terms Ensuring receipt
Compliance with international law Exporting considerations Exporting documents International export regulations Exchange control licenses Export quotas Commercial invoice Bill of lading Export declaration Packing list Insurance document Certificate of origin
Compliance with international law Importing considerations Import regulations Importers liability Importing documents Commercial invoice Bill of lading Import quotas Import declaration Antidumping legislation Packing list Tariff classification Insurance document Certificate of origin
Chapter 4 Incoterms
Incoterms Summary of Incoterms Departure (EXW) Main Carriage Unpaid (FCA, FAS, FOB) Main Carriage Paid (CFR, CIF, CPT, CIP) Arrival (DAF, DES, DEQ, DDU, DDP)
Incoterms
Choosing the right Incoterm Location of the purchaser and seller Factors that help determine which Incoterm is the best one for an organization to use A company s experience with international trade Ability for either party to obtain cost advantages for transportation or warehousing
Chapter 5 Production Management
Production management Materials requirement planning Monitoring performance Scheduling steps Production planning activities Planning demand fluctuations Time buckets and planning horizons Meeting requirements
Adapting product design Packaging and transportation Concurrent and parallel processing Standardization
Standards Type Performance standards Work standards Customer service standards ISO 9000 standards
What is subject to regulations? Production process Product Packaging and labelling
Types of regulations Type Health and safety Environmental Packaging Labelling Packing Marking Safety
Product release procedures Double checking product specifications and shipment numbers against customer orders Examining random selections of the product for quality problems Confirming all necessary documentation has been completed Examining packaging to ensure it meets required regulations Preparing audit reports confirming quality procedures that were implemented during production Checking that any required certification procedures have been applied to the shipment
Chapter 6 Inventory Management
Inventory and global supply chains Category Raw material Finished product Work in progress (WIP) Consumables Service, repair, replacement and spare items (S&R items) Inventory type Service Pipeline Contingency Safety stock Efficient procurement
Inventory management terminology Term Ordering Inventory levels Descriptions Economic order quantity (EOQ) On-hand stock Net stock Net inventory Stock-outs Finances Demand Stock-outs Average inventory value Inventory carrying cost Lost sales cost Total policy cost Annual demand Forecast annual demand Lead time Lead time demand
Inventory management Select a system for storing inventory Inventory tracking
Maintaining optimum inventory levels Optimal levels Apply JIT Quick response strategy Vendor managed inventory
Planning storage Warehouses and distribution Centralized and decentralized warehousing Selecting locations
Chapter 7 Managing Delivery
Managing delivery
Planning transportation Preparing a Transportation Activity Profile Origins and destinations for required shipments between different supply chain locations, such as warehouse to retail store or supplier to manufacturing site Required frequency of shipments between different supply chain locations Time required to transport goods from origin to destination Modes of transport available for the required shipments and their transit times Transportation costs for each available mode of transport
Transportation activity profile Shipping frequency Carrier contract negotiation What needs to be planned Modes of transportation Shipment rating Route selection Carrier
Upon arrival Using foreign cargo facilities Customs clearance Receiving payment
Chapter 8 Managing Intermediaries
Intermediaries Types of intermediaries Freight forwarders NVOCC Trading houses Insurance agents Financial institutions Export merchants Export agents Import agents Import merchants
Third party logistics (3PLs) Services offered: Inbound freight Customs and freight consolidation Warehousing Order fulfillment Distribution Management of freight to customers
Cargo insurance Insurance conditions Free of Particular Average (FPA) American Conditions (FPAAC) FPA British Conditions (FPAEC) With average (WA) All risk Special clauses Marine extension clause War clauses Exemptions Act of God Enemies of the Queen or State Defect or inherent vice in the goods Act of default of the shipper or owner
The reverse supply Type of Return Close-outs Buy-outs Job-outs Surplus Defectives Non-defective defectives Salvage Returns Safety issue returns Recalls
Chapter 9 Managing Returns
Managing the returns process
Chapter 10 Managing IT
Information technology System Customer Relationship Management System (CRM) Product Data Management System (PDM) Product Lifecycle Management System (PLCM) Inventory Management System (IMS) Transportation Management System (TMS) Warehouse Management System (WMS)
e-commerce solutions Procurement and purchasing Online retail sales Customer relationship management (CRM) Inventory Management Transportation management Warehouse management Collaborative planning
Benefits of e-commerce Cost efficiencies Simplification Customer service improvements Tracking Automatic notifications Auditing Labelling Reduced administrative costs
Chapter 11 Trade Documentation
Trade documentation Standard Export and Import Documentation Export Commercial invoice Bill of lading Packing list Insurance document Certificate of origin Export declaration Import Commercial invoice Bill of lading Packing list Insurance document Certificate of origin Import declaration
Trade documentation Export documentation Export licenses or permits Dangerous goods declaration Exchange control document Inspection certificates Safety certifications Import documentation Special certificate of origin Customs bond Certified consular invoice Additional documentation Packing declaration Inspection certificate Quality certificate Phytosanitary certificate Fumigation certificate Veterinary certificate Public health certificate ATA carnet
Transportation documents Document Waybill Bills of lading Straight bill of lading Short-form bill of lading House bill of lading Intermodal bill of lading Forwarder s receipt
Chapter 12 Managing Risks
Supply chain risks
Security initiatives The Customs Trade Partnership against Terrorism (C-TPAT) The International Ship and Port Security Code (ISPS Code) The Container Security Initiative (CSI) Partners in Protection (PIP) Free and Secure Trade Program (FAST)
Chapter 13 Completing Import Documentation
Required documentation Bill of lading Carrier s manifest (Cargo Control Documents) Canada Customs Invoice or Commercial Invoice Import permits, certificates or licenses (as required) Other documentation required to satisfy CBSA or other government departments Certificate of origin (if applicable)
Sample: Bill of Lading
Sample: Cargo Control Document
Sample: Canada Customs Invoice
Certificate of Origin NAFTA (North American Free Trade Agreement) CIFTA (Canada-Israel Free Trade Agreement) CCFTA (Canada-Chile Free Trade Agreement) CCRFTA (Canada-Costa Rica Free Trade Agreement) Form A Certificate of Origin from certain developing countries For Canadian importers, the NAFTA certificate of origin is the one that is most likely to be used, because the majority of imports into Canada come from NAFTA countries.
Sample: Certificate of Origin
Consolidated shipments What are consolidated shipments? What are the documentary requirements?
Electronic data interchange systems Advance Commercial Information (ACI) Accelerated Commercial Release Operations Support System (ACROSS) Customs Self Assessment (CSA) Release Notification System
The importing procedure
Release procedures Release with full accounting and payment Release on minimum documentation (RMD) G7 Import One Step Release on Full Documentation (RFD)
Chapter 14 Clearing Imports Through Customs
Clearance procedures Accounting Cargo Control Document Invoice Canada Customs Coding Form (B3) Certificates of origin
Calculating tariffs and duties When to pay GST Assessing value of imported goods Making payments Penalties and interest Self adjustments Re-determinations Duty drawbacks
Dispute resolution Making an appeal Appealing the decision